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Bottom Line Up Front

  • The military moved to a new retirement plan in 2018 called the Blended Retirement System (BRS), which combines elements of the 2 prior separate plans.
  • The BRS includes both a savings plan with government contributions and an annuity for those who reach full retirement after 20 years.
  • The new plan offers options that may require some up-front financial planning to get the most out of.

Time to Read

4 minutes

April 14, 2022

On Jan. 1, 2018, the military revamped its retirement plan by moving to the Blended Retirement System (BRS). But what exactly is the BRS, and how will it affect you in the uniformed services? Read on to find out how to make the most out of your military retirement. 

Understanding the Military’s New Blended Retirement System

Before the BRS took effect, there were 2 ways that you, as a servicemember, could prepare for retirement. One was by performing 20 years of active service, after which you'd become eligible for an annuity upon retirement. (An annuity is a defined benefit that provides monthly payments for life.) The second was by paying into the Thrift Savings Plan (TSP), a defined contribution benefit plan similar in many ways to private-sector 401(k) plans. Both are great programs, but the key point is that they were previously separate.

The BRS blends the 2 legacy retirement systems into 1. To be precise, the BRS uses the military’s current annuity formula—annuity provision times years of service multiplied by the average of the highest 36 months of pay—and combines that with an automatic 1% Department of Defense TSP contribution. Also, after 2 years of service, the Department of Defense will match your TSP contributions up to 4%:

Blended Retirement System Formula
Personal ContributionDoD Auto ContributionDoD Matching ContributionTotal

Differences Between the Old and New Programs

In the old system, if you left before the 20-year mark, you got nothing from the military in retirement benefits. Under the BRS, if you serve for at least 2 years, but less than 20, you keep the DoD TSP contributions. You still have to serve 20 years to make it to full retirement and receive annuity payments. Besides blending the old programs, the BRS is different in these 3 ways: 

  • Combined annuity and TSP benefit: The old annuity provision for retired military members was 2.5%. The new annuity benefit is 2%. However, with a blended retirement plan, you get the added DoD Auto Contribution of 1% to your TSP, which offsets the change in annuity benefit. 
  • New option for mid-career continuation pay: When you reach between 8 and 12 years of service, you’re eligible for Continuation Pay. This is a retention bonus that you’ll get when you commit to 4 more years of military service. 
  • New lump sum option: When you retire, you may be eligible to choose a 25% or 50% discounted lump sum payment of your estimated retirement pay in exchange for reduced monthly installments. At Social Security full retirement age (currently age 67), your monthly payments return to the full amount. This option shouldn’t be taken without first doing some financial planning, as there are many factors to consider. At Navy Federal Credit Union, we have personal finance counselors as well as the resources of Navy Federal Investment Services that can help. 

Who’s Covered Under the New BRS?

If you joined the military before Jan. 1, 2018, you’re automatically grandfathered into the old system. The BRS covers military members who joined on or after Jan. 1, 2018.

Getting the Most Out of Your Retirement

It’s no secret that the military has one of the best retirement plans around for both Active Duty and reserve component members, and the BRS continues that tradition. Of course, if you want to make sure you’ll have enough money saved to retire in style, it’s always a good idea to stay on top of savings strategies and consider extra retirement savings plans. One of our experts from Navy Federal can review your current situation, plus how much money you’ll get from the military upon retirement, and help you plan out a strategy to work toward your goals. Find a financial advisor who can help you understand your options.

Next Steps Next Steps

  1. The Department of Defense has a calculator that can help you understand how the BRS will affect your retirement.
  2. With our Retirement Interest Calculator, you can see how other kinds of  plans can contribute to your retirement savings.
  3. One of our Navy Federal financial advisors can help you design a plan to reach your retirement goals.


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This content is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.